Paul Davidoff starts this insightful interview by stating: “Where there are trusts involved, in particular offshore trusts or any other foreign elements, there is no substitute for good, clear and comprehensive advice. However, choosing an adviser is a very personal decision, but whatever ‘softer’ qualities you are looking for, making sure the adviser is a member of STEP is an excellent start”. Here he reveals more about his journey into specialising in the private client field and what clients should consider when delving into onshore or offshore trusts.
When working with lawyers from other jurisdictions, what are their common misconceptions about the UK’s legal system and regulations?
When advising clients who have non-UK connections, some foreign lawyers expect that, under English/Welsh law, a person must leave a specified portion of their estate to certain relatives. To say we do not have such rules in England is not quite right, as, amongst other things, there are statutory provisions allowing certain people making a claim against an estate if not adequately provided for - importantly, these are not exactly the same as the foreign ‘forced heirship’ concepts.
Also, where our foreign clients buy real property (eg a house) in the UK, foreign advisers frequently believe that a Will from the client’s home country will be sufficient to deal with the UK property and that no other advice is needed. It is rare that a foreign Will is the most appropriate way to deal with a property in the UK and, at the very least, an English lawyer should be instructed to advise on this and also on the raft of important potential UK tax liabilities which affect UK property owners.
Can you share three important points all people should note when regarding offshore, as opposed to onshore, trusts?
(a) The UK tax treatment of offshore trusts (trusts resident outside the UK) is almost entirely different to that of onshore trusts (trusts resident in the UK). The complexity of the offshore regime cannot be overstated. Misunderstanding about the tax rules, their apparent unfairness as between beneficiaries and unexpected tax charges on UK-resident beneficiaries can lead to bad feeling between the trustees and the settlor or beneficiaries.
(b) Wherever a trust is resident, the trust assets do not belong to the beneficiaries nor to the settlor. This needs to be made absolutely clear at the outset and the settlor and the beneficiaries need to understand that they cannot direct trustees to use the trust’s assets how they (the settlor/beneficiaries) want, unless there is an express power in the trust instrument to that effect. Courts take a very dim view of trustees who merely follow the direction of the settlor or a beneficiary, without giving the matter proper deliberation.
(c) Many offshore trusts will need professional trustees and the administration will be carried out by a trust administration company (and not free of charge by the trustees personally). Offshore trustees are likely to need tax (and possibly legal) advice from more than one jurisdiction in order to make appropriate decisions. Consequently, the costs involved with offshore trusts tend to be much higher than for onshore trusts. It is vital to consider: what is the purpose of this trust and do the likely costs and complexity involved negate the benefits of having the trust?
Can you share the transition and motivation behind originally specialising in Classics and Arabic to the legal industry? Do you see this qualification inspiring you in a unique way when dealing with legal cases?
Until after the end of university, I had never considered becoming a lawyer. After a spell in IT, I was called up for jury service and sat on one jury for four days. Just over a year later, I had given up IT and had started the law conversion course. In the end, I was most intrigued by the ‘private client’ field (Wills, trusts, probate, tax, etc) as this is something which affects everyone and gave me the opportunity to find ways to help individuals and families sort out their personal affairs and navigate the complexities of the tax that affects them.
Many say that classicists make good lawyers (and computer programmers!). Latin and Greek are very logical languages. Arabic is said to be one of the hardest languages to master. Law involves a lot about interpreting language and conveying meaning concisely and accurately – something for which my linguistic background was perfect training. Experience of other cultures is a great advantage in any walk of life – the wider one’s experience, the easier it becomes to understand other people.
Paul Davidoff
Partner and Head of Private Client
+44 (0)207 400 7770.
pdavidoff@moonbeever.com
Moon Beever, Bedford House, 21a John Street, London WC1N 2BF
Paul Davidoff a Partner and Head of Moon Beever’s Private Client team. He is a prize-winning member of STEP (the Society of Trust and Estate Practitioners) and has been recognised in Chambers & Partners, the Legal 500, Super Lawyer, LMG Euromoney’s ‘Expert Guides’ and the Citywealth ‘Leaders List’. He has extensive experience in all aspects of Private Client work, advising both UK and international clients on Wills and succession planning, all aspects of onshore and offshore trusts and personal UK tax planning. He acts for UK and non-UK domiciled individuals, executors and other fiduciaries. The US, the EU and the Far East are just some of the regions where he has had recent engagements.
Moon Beever is a long-established firm in central London which has a long history expertise on private client and property matters, acting for many literary and aristocratic characters as befits its location in the heart of London’s literary quarter. Its private client and property teams now have a proven track record of advising non-UK individuals or those with non-UK interests. Since the mid 1980’s the firm’s position in the commercial arena has been subject of expansion and development, in particular the insolvency and debt recovery spaces, resulting in an enviable reputation within the profession. The firm also advises clients on all company and commercial matters, general litigation, family law and employment law.
